I had posted a few months ago about financing for a bar and grill purchase.. Not much response.. So im throwing it out there again.. Credit is shot.. Yeah. I know.. sounds awful to start off with but i am willing to explain to the right person. I would have 10% down from the current owner . .. Loan amount would be 100,000. The establishment has been operated for many years (30+) and the current owner is just ready for a full retirement. Right now the business is closed just waiting to be reopened. Problem being.. My credit score is not helping me by any means in acquiring a loan. I myself have no experience in running a bar and grill but the owner is willing to work with me as much as possible to help me get going, i have others who are willing and have experience in all areas, payroll, labor rights, operating an establishment, etc etc etc. My cousin also has his own Tavern in the same area and is also willing to help me out as much as his schedule is willing. If a second signer was needed my father has expressed interested in backing me. Any help, suggestions offers( ) would be greatly appreciated. Thanks for listening..

Kelly

Sounds like you have three options:
1. Seller financing
2. Partnership with someone with resources
3. SBA loan. I'm assuming that there is no real estate involved. Therefore, the cash flow from the business must be really strong. The lenders will probably require 3 years business tax returns from the seller. If the cash flow is strong, you may be able to get away without enough collateral. Otherwise the lender will require some asset as collateral - whether it is yours or your family member's. Since you don't have experience running the tavern, you'll need to hire a manager and the lender will want to look at the manager's resume. You'll also need a business plan and probably working capital. The SBA can help you with a working capital line/loan.

If yor credit is shot because of recent bankruptcy, forget SBA. If it is other thinkgs like late payments, judgments, etc., and you can explain and document stuff, lenders might overlook some of the derogatory items on the credit report.

Talk to your local banks regarding SBA financing. Some of the smaller banks specialize in SBA loans. You may have to talk to a number of lenders before you find the right one. Good luck and keep us posted!

I see the following:

1- The only equity / subordinated debt is coming from the seller financing.

2- The business is not operating right now.

3- You have no experience in the industry.

4- Bad personal credit.


Any of the above is sufficient to stop a deal. There are no lenders out there that would do this loan in my opinion. You need equity partners.

Thank you for the suggestions.. Im going to keep looking and trying.. Cant give up.....